Lease purchase agreement between BEA, school progresses

The borrowing of $24.95 million by the Bartlesville Education Authority to fund some Bartlesville Public School District projects was approved by the Bartlesville City Council during a meeting Monday night.

Through a lease purchase agreement with the BEA, the school district will be able to take advantage of current construction costs and interest rates — benefits the district could not have taken immediate advantage of with existing debt caps.

The BEA — which consists of City Council members and was formed to oversee the lease purchase — will take proceeds of the bank loan and construct the facilities, leasing them to the school district until the loan is paid off.

A financing mechanism that multiple school districts across the state have used over the past decade, the lease purchase agreement will not count toward the school district’s debt cap, John Wolff, vice president of Municipal Finance Services Inc., said previously. The city will not be responsible for interest or principle payments related to the debt incurred through the lease purchase arrangement and will not be held liable for any delinquent payments on the mortgage.

The agreement will allow for the expansion of the Bartlesville High School facility and improvements to Central Middle School, as well as the demolition of the current Madison Middle School facility.

Wolff said he sent financing packages to seven banks, and that the low bidder was JPMorgan Chase, which bid two different rates — a 2.40 percent with no pre-payment option or a 2.46 percent with an option of pre-payment — for a six and a half year term.

The “size of the transaction” is $24.95 million and it is a goal to close the transaction on or about Nov. 1, Wolff told the City Council.

According to Wolff, the lease payments made to the city will be $613,770 a year. Wolff said the lease payments will be the school district’s interest payment. He said the interest cost will come out of the school district’s building fund.

During a Bartlesville Board of Education meeting earlier Monday evening, Wolff said it was recommended that the bid be awarded to JPMorgan Chase and the board gave its preliminary approval.

“This, technically, is not our financing. This is the Bartlesville Education Authority’s financing, but they’re looking to us to make a recommendation to them on what we would like to see approved,” said Board President Doug Divelbiss, during the Board of Education meeting. “At the end of the day, we’re making the lease payments to them to finance this.”

Rules for posting comments

Comments posted below are from readers. In no way do they represent the view of Stephens Media LLC or this newspaper. This is a public forum.

Comments may be monitored for inappropriate content but the newspaper is under no obligation to do so. Comment posters are solely responsible under the Communications Decency Act for comments posted on this Web site. Stephens Media LLC is not liable for messages from third parties.

IP and email addresses of persons who post are not treated as confidential records and will be disclosed in response to valid legal process.

Do not post:

Potentially libelous statements or damaging innuendo.

Obscene, explicit, or racist language.

Copyrighted materials of any sort without the express permission of the copyright holder.

Personal attacks, insults or threats.

The use of another person's real name to disguise your identity.

Comments unrelated to the story.

If you believe that a commenter has not followed these guidelines, please click the FLAG icon below the comment.